Mundra Aluminium Limited (MAL), a wholly-owned subsidiary of Adani Enterprises has emerged as the “preferred bidder” for a bauxite block in Odisha. Following the announcement, the shares of Adani Enterprises appreciated to the tune of 15% to ₹ 1568.00 apiece against its previous close of ₹ 1363.85.
According to an exchange filing, MAL had participated in the auction proceedings invited by the government of India, during which it was declared as the preferred bidder and received a Letter of Intent (LOI) dated February 27, 2023, from the Government of Odisha in respect of the Kutrumali Bauxite Block in Odisha.
The Kutrumali bauxite block is estimated to have resources worth 128 million tonnes and is located in the Kalahandi and Rayagada districts of Odisha.
MAL is a wholly owned subsidiary of the flagship company of the Adani group. It was incorporated with the objective of carrying out the business of mining, refining, smelting, development, production and operations of bauxite, alumina and aluminium.
Interestingly, Adani Enterprises’ share price took a sharp U-turn on Tuesday and has gained a whopping 36.49% in the past two days to trade at ₹ 1520.00 apiece at 12:03 PM on Wednesday.
Adani Enterprises has a market capitalization of 1,55,479 crores and is a large-cap company. It has a low return on equity of 3.94% and a high debt-to-equity ratio of 1.31. Its shares were trading at a price-to-earnings ratio of 74.88, which is significantly higher than the industry P/E of 24.97, indicating that its shares might be overvalued as compared to its peers.
Written by Simran Bafna
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